The most common types of expenses that qualify for tax-free reimbursement are healthcare, dependent care, and transportation and parking.
Plan restrictions may apply. Check with your plan administrator.

The amount of Healthcare reimbursement may not exceed the maximum allowed under the plan. Please review your Summary Plan Description or see your Plan Administrator for more information.
Healthcare expenses that do not qualify for reimbursement.

Cosmetic surgery and procedures

Dental bleaching

Marriage and family counseling

Over-the-counter items, drugs, or medications that are not medically necessary or are not prescribed by your physician.

Weight loss programs for general health or appearance

Premiums you or your spouse pay for insurance coverage (Payroll-deducted premiums sponsored by your employer are eligible under the Premium Only Plan)

Long-Term Care Insurance does not qualify for reimbursement from a Health FSA. In addition, Long-Term Care Insurance can not be offered through a Cafeteria Plan. (However, Long-Term Care Insurance can be offered through a Section 105 HRA plan.)

Dependent Care expenses that doqualify for reimbursement.
Expenses necessary for you and your spouse (if married) to be gainfully employed. For more information click here to see IRS Publication #503.

Nanny expenses, for services provided inside your home, are eligible to the extent they are attributable to dependent care expenses and expenses of incidental household services.

Dependent care expenses incurred for services outside your home, providing they are incurred for the care of a qualifying dependent that regularly spends at least 8 hours per day in your home.

Registration fees to a daycare facility are eligible as long as the fees are allocable to actual care and not described as materials or other fees.

Nursery school expenses are eligible, even if the school also furnishes lunch and educational services.

Food and incidental expenses (diapers, activities, etc.) may be eligible if part of dependent care charge.

Expenses paid to a relative (e.g. child, parent, or grandparent of participant) are eligible. However, the relative cannot be under age 19 or a tax dependent of the participant.

FICA and FUTA payroll taxes of the daycare provider are eligible.

Dependent care expenses incurred to enable the employee to find work are eligible.

The reimbursement may not exceed the smaller of the following limits:
– The maximum allowed under the plan.
– $5,000 (if you are filing a joint tax return) and $2,500 if separate returns are filed.
– Your taxable compensation (after all compensation reduction elections).
– If you are married, your spouse’s actual or deemed earned income.

Dependent Care reimbursement limitations
Dependent Care reimbursement may not exceed the smaller of the following limits:

The maximum allowed under the plan.

$5,000 (if you are married and filing a joint tax return or are filing as single, head of household) and $2,500 if you are married and separate returns are filed.

Credit available for expenses associated with a legal foreign adoption is limited to $10,390 for each eligible child even if the child is “child with special needs.”

Reasonable and necessary legal adoption fees.

Court costs.

Attorney fees.

Other expenses which are directly related to, and the principal purpose of which is for the legal adoption of an eligible child.

Qualifying Child:
– Individual who has not attained the age of 18 as of the time of the adoption.
– Physically or mentally incapable of caring for himself.

A Child With Special Needs:
– Any child who cannot or should not be returned to the home of his or her parents and a specific factor or condition makes it reasonable to conclude that the child cannot be placed with adoptive parents unless assistance is provided as determined by a state.
– The child must be a citizen or resident of the United States.

Income Limitations:
– The credit is phased out ratably for participants with a household modified adjusted gross income over $155,860 and no credit is allowed to participants with a household modified adjusted gross income of $195,860 or more.

Adoption expenses that do not qualify for reimbursement.

(For additional information click here to view IRS Publication 968.)

Adoption of a child belonging to the participant’s spouse.

Illegal adoption fees.

Surrogate parenting arrangements.

Legal adoption expenses for which another deduction or credit is allowed.

HRA expenses that doqualify for reimbursement.
Only expenses not reimbursed by insurance or any other plan can be claimed.